- Services PMI 50.7 vs. 50.3 expected and 49.2 prior.
- Composite PMI 49.7 vs. 47.7 prior.
Key findings:
- Renewed, albeit only marginal rise in services activity.
- Softer decline in new business signalled.
- Cost and charge inflation pick up.
Comment:
Commenting on the final PMI data, Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, said:
“Good news for Italy's service providers at the end of the year. The HCOB Services PMI rose into growth territory in December, partially offsetting the decline seen in November. The HCOB Composite PMI, a weighted average of the manufacturing and services indices, has improved overall but still indicates stagnation due to the weakness in the manufacturing sector. According to our HCOB Nowcasting model, Italy's GDP growth is also expected to stagnate in the fourth quarter.
Input prices for Italian service providers remain elevated according to the HCOB PMI survey. A range of costs are putting pressure on companies, with wages and energy being the most prominent drivers. Rising input costs are affecting the prices of end products, which also increased in December. This indicates that at least some of the costs can be passed on to the end consumer. Overall, the rate of output charge inflation was moderate.
Business activity in Italy's service sector increased slightly in December. However, caution is advised in interpreting this, as the index indicated contraction in the previous month. Overall new orders declined for the second consecutive month in December, while for foreign orders, a trend of contraction has been observed for a longer period. Additionally, outstanding business has been declining for some time. This paints a bleak picture for the coming months. Future business expectations are below the 2024 annual average.”
